Over the past year we’ve been talking about the changing health care environment and the challenges facing Mayo Clinic. We’ve also talked about our efforts to transform our practice to meet the evolving needs of our patients and ensure Mayo’s long-term success. Because of the outstanding work that you do every day, we are seeing progress in key areas and the early impact of practice innovation. We thank each of you for your contributions to these endeavors.

One of our efforts last year included a review of our benefits. We are committed to providing you and your families with high quality benefits and, to honor that commitment, we regularly review benefits and make adjustments as needed. Our goal, as always, is to secure a highly competitive benefit package that allows us to recruit and retain world-class staff while providing sustainable benefits for the long term.

We understand how valued Mayo’s benefits programs are and sought guidance to help our review. We solicited extensive input from representatives across our campuses and charged a work group of physicians, Human Resources leaders and allied health staff to review our options and develop recommendations. We also considered your All Staff Survey feedback, which indicated a desire for consistent benefits and policies across all locations.

Four factors emerged as primary considerations for making benefit changes:

1. We are committed to providing competitive benefits to recruit and retain world-class staff.

2. We are committed to integrating Mayo benefits to align with our efforts to become a single, integrated organization and share a common set of basic benefits with staff at all locations.

3. Our benefits need to be affordable, for Mayo and for you, to be sustained now and into the future.

4. We need to make more efficient use of our health care resources to ensure that care is available at the right time, the right place and the right level for everyone.

After a year-long review, the Board of Governors approved the benefit changes summarized below that will take effect Jan. 1, 2015. This will give you nearly a year to learn about your new benefit options before you need to make decisions. Much more information and resources are available on your benefits site, accessible from your location’s “For You” page.

Benefits IntegrationMayo is committed to providing pension and 403(b)/401(k) retirement benefits to its staff and we are pleased to offer these benefits to all who work for Mayo. While many employers have ended their pensions because they are expensive to maintain, we remain committed to funding our pension, having invested $1.1 billion in the plan over the past three years. Additionally, as announced in 2009, we are adding a match to the 403(b)/401(k) plan in 2015. These plans will be among the set of basic benefits to be shared with Mayo Clinic Health System and Gold Cross. Other benefits in the integrated package will include:

· Medical

· Dental

· Life and Accidental Death and Dismemberment (AD&D) insurance

· Short-term Disability

· Long-term Disability

New Medical Benefits for All Active StaffAll Mayo staff, including MCHS and Gold Cross, will have the all-new options for medical coverage:

· Mayo Premier

· Mayo Select

· Mayo Basic

New Retiree Medical

Mayo is changing the way it will provide access to retiree health care coverage for staff who retire on or after Jan. 1, 2015. The changes apply differently depending on whether or not you are Medicare-eligible at retirement and whether or not you currently are eligible for the Mayo premium subsidy for retiree medical. Because of this variability, please review the information on your benefits site, accessible from your location’s “For You” page. With these changes, we believe the majority of our staff will find more choice in plan options, cost-sharing levels and provider networks than currently provided by the Mayo Medicare Supplement. Additionally, we are working with insurance carriers to ensure that Mayo Clinic is among the provider options.

Briefly, retiree medical changes are as follows:

· Medicare-eligible retirees will access coverage through a private Medicare marketplace with personal assistance from a dedicated service partner. The service partner will help our new retirees compare plans and enroll in the plan that best meets their needs, and also assist with claims filing and other needs. Details of this service are still in final development, and we expect to announce our service partner in early March 2014.

· Early retirees not yet eligible for Medicare will choose from the new active staff medical plans until a date for the transition to the public marketplace is determined, potentially by 2016. The public marketplace is new and not as well established as the private Medicare marketplace, which has been available for many years. Early retirees also will receive personal assistance from our service partner.

As leaders, we made these decisions after careful and lengthy deliberation. It has been about 10 years since we’ve made significant changes to our medical plans. We are not the same organization we were 10 years ago. Health care isn’t the same as it was 10 years ago. We believe the changes we are announcing today will sustain our valued benefits for years to come. That is our commitment to you and to your families.

John Noseworthy, M.D.President and CEOMayo Clinic

Jeffrey BoltonVice President, AdministrationMayo Clinic

Important Legal Information:This is a high-level summary of certain Mayo Clinic benefits. The summary may or may not be applicable to union employees. It is intended for general information purposes only and should not be considered legal, investment or other benefits advice. This communication is not a legal Summary Plan Description or plan document. If there is a conflict with this information and an official plan document, the official plan document is controlling. Mayo Clinic reserves the right to terminate or amend the Plans at any time, in whole or in part, for any reason. Any such amendment or termination may apply to current and future participants, current and future retirees, covered spouses, beneficiaries and dependents.